INDE 301 Midterm, Spring 2017

American University of Beirut, Faculty of Engineering and Architecture INDE 301 Engineering Economy, Quiz N°1 1) What is the future worth of an annual series of $1300 for 39 years at an interest rate of 0.75% per year? a) Use interpolation, b) Use formula. 2) A small construction company expects its costs for maintenance of its heavy equipment to be $15,000 in year 1 and amounts increasing by $1000 each year thru year 5. At an interest rate of 10% per year, what is the equivalent annual worth of the maintenance costs? 3) What is the present worth of an energy cost of $10,000 in year one and amounts increasing by 6% per year thru year 10, if the interest rate is 12% per year? 4) Bonus: What is the equivalent annual worth (in years 1 thru 10) of repair costs of $15,000 in years 1 thru 4 and $20,000 in years 5 thru 9 at an interest rate of 10% per year?